What is Payday Super?

Payday super is the federal government’s proposed legislation to make employers pay their employees’ super at the same time as their wages or salary. The proposed start date for payday superannuation is 1 July 2026.

As at 21 October 2025, this law has not passed through parliament, but it is anticipated that it will become legislated as drafted. This reform, known as Payday Super, replaces the current quarterly payment system and aims to:

• Improve retirement outcomes through faster compounding.
• Reduce unpaid super.
• Increase transparency and accountability for both employers and employees.

Current vs New System

• Currently, employers must pay SG contributions quarterly, by the 28th day after each quarter ends.
• From 1 July 2026, SG contributions must be received by the employee’s super fund within 7 business days of each Qualifying Earnings (QE) Day – the day wages are paid.

Key Employer Obligations

From 1 July 2026, employers must:

1. Accurately calculate SG contributions based on each employee’s Qualifying Earnings (QE) – which includes:
2. Ordinary Time Earnings (OTE)
3. Salary sacrifice contributions
4. Other amounts currently included in SG calculations
5. Pay super within 7 business days of each payday (QE Day).
6. Ensure compliance with the employee’s chosen super fund. Penalties apply for breaches of fund choice rules.

For new employees, super contributions must be received by their fund within 20 business days of their first payday.

Super Guarantee (SG) Charge Updates

If employers fail to meet their obligations, they may be liable for the updated SG Charge (SGC), which includes:

• Outstanding SG shortfall: Remaining SG after accounting for late contributions (calculations based on QE), plus
• Notional earnings: Daily compounding Interest from day after due date, plus
• Employer’s administrative uplift amount: Additional charge of up to 60% of the shortfall will be added, plus
• Employer’s choice loading (if any): Additional 25% penalty for not complying with fund choice rules.
  

How Can You Prepare for Payday Super?

Employers should begin preparing now to ensure compliance by July 2026:

1. Review payroll and clearing house systems to ensure they support real-time SG payments.
2. Confirm employee fund choices are correctly recorded and followed.
3. Monitor SG payments closely to avoid shortfalls and take advantage of voluntary disclosure options if needed.

There is a common myth that dual cab utes are automatically exempt from FBT.

However, if an employer provides dual cab utes to staff to complete their duties and the vehicle is available for personal use, then the benefit may still be subject to FBT.

1. an eligible vehicle, which means it is designed to carry:
   – a load of one tonne or more;
   – more than eight passengers (including the driver); or
   – a load under one tonne and not primarily designed for carrying passengers;
   
2. used only for limited private use (i.e. minor, infrequent, and irregular), such as the occasional trip to the tip or helping a someone move house.

If a work dual cab ute doubles as the family taxi or is used for weekend personal trips, it is not exempt.

If an employee’s personal use does not meet both exemption conditions, the employer will be liable for FBT.

The taxation of capital gains on property recently passed its 40th anniversary.

Record keeping

The ATO requires owners to keep records for CGT purposes relating to:

• the acquisition of the property and related expenses, such as stamp duty and legal fees;
• the disposal of the property and related expenses, such as sales commission and legal fees;
• the costs of owning the property; and
• any improvements and alterations to the property.

Records for buying, owning and selling property need to be kept for at least five years after the disposal of the property.

CGT for land that is subdivided

For CGT purposes, subdividing land results in a single block of land becoming two or more separate CGT assets, but does not cause a CGT event to happen.

When the subdivided land is sold, CGT is calculated for each parcel based on the date on which the original land was acquired.

The cost base of the original land is divided between the subdivided blocks on a reasonable basis. 

Subdividing a main residence

Where property on which a main residence is situated (the dwelling) is subdivided, and the vacant block of land is then sold, the sale of the vacant block is not eligible for the Main Residence Exemption.

This is the case even if the vacant land was only ever used for private purposes.  This is because vacant land is exempt under the Main Residence Exemption only if it falls within one of the rules that extend the Main Residence Exemption. For example, under the adjacent land rule, the sale of an adjacent block of up to two hectares can be exempt from CGT if it was used primarily for private or domestic purposes in association with the dwelling and the same CGT event happens to the adjacent land as the dwelling (i.e. sold to the same purchaser at the same time).

The sale of the subdivided block containing the dwelling may be eligible for the Main Residence Exemption.

Importantly, if the original dwelling is removed or demolished in order to do the subdivision, the Main Residence Exemption will be lost and normal CGT rules will apply to the sale unless a brand new dwelling is constructed and moved back into. CGT is always complex and every situation has its own facts therefor it is important to engage early so that we can provide assistance and avoid any unintended tax consequences.